Printable cheat sheet

Texas real estate property management math cheat sheet

Built for Texas sales agent exam prep. Use this to build the operating budget in order: gross potential rent, vacancy, effective gross income, operating expenses, and net operating income.

Reviewed August 30, 2026 · Pearson VUE outline #094401 · Fannie Mae multifamily income guidance

Use the calculator

Gross potential rentUnits x rent x 12

Full-occupancy annual rent. Vacancy comes off this number.

Vacancy lossGPR x vacancy %

Vacancy and collection loss is subtracted from gross potential rent.

Effective gross incomeCollected rent + other

Add other income such as laundry, parking, or fees after subtracting vacancy.

Net operating incomeEGI - operating expenses

NOI excludes the mortgage payment and income taxes.

Management feeCollected rent x fee %

Usually a percent of rent actually collected, applied after vacancy.

Occupancy rate1 - vacancy rate

Occupancy and vacancy total 100%.

The exam setup rule

Find gross potential rent: units times monthly rent times 12.
Subtract vacancy and collection loss.
Add other income for effective gross income.
Subtract operating expenses for net operating income.
Apply the management fee to collected rent unless told otherwise.

Five worked examples

Gross potential rent10 units at $1,200 per month

10 x 1,200 x 12 = $144,000 gross potential rent.

Effective gross income$144,000 GPR, 5% vacancy, $6,000 other income

144,000 - 7,200 = 136,800 collected. Plus 6,000 = $142,800 effective gross income.

Net operating income$142,800 EGI, $48,000 operating expenses

142,800 - 48,000 = $94,800 net operating income.

Management fee$136,800 collected rent, 8% fee

136,800 x 0.08 = $10,944 management fee.

NOI to value$94,800 NOI, 8% cap rate

94,800 / 0.08 = $1,185,000 value by the income approach.

Traps to check

Do not subtract the mortgage payment to find NOI.
Do not add other income before subtracting vacancy from rent.
Do not apply the management fee to gross potential rent when the stem says collected rent.
Do not forget to annualize monthly rent.
Do not include income taxes or depreciation in operating expenses for NOI.

Sanity check

Effective gross income is always less than gross potential rent when there is vacancy.
NOI is income minus operating expenses only, before financing.
Higher vacancy lowers collected rent, effective gross income, and NOI.

Property management math workbook

Write the income ladder before using a calculator. Keep the management fee on its stated base and subtract it only once.

Drill 1 · Full income ladder12 units at $1,350 monthly, 6% vacancy, and $7,200 other income

Find gross potential rent, vacancy loss, collected rent, and effective gross income.

GPR
Vacancy loss
EGI

Drill 2 · Fee and NOI$190,000 EGI, $58,000 other operating expenses, 7% fee on $175,000 collected rent

The management fee is separate. Find the fee, total operating expenses, and NOI.

Fee
Total expenses
NOI

Drill 3 · Budget varianceBudgeted income $160,000 and expenses $55,000; actual income $164,000 and expenses $58,500

Use actual minus budget. Find income, expense, and NOI variance, then label each favorable or unfavorable.

Income variance
Expense variance
NOI variance

Answer key

GPR is 12 × $1,350 × 12 = $194,400. Vacancy loss is $11,664. Collected rent is $182,736. EGI is $189,936.
Fee is $175,000 × 7% = $12,250. Total operating expenses are $70,250. NOI is $119,750.
Income variance is +$4,000 favorable. Expense variance is +$3,500 unfavorable. Budgeted NOI is $105,000, actual NOI is $105,500, and NOI variance is +$500 favorable.